Why Italian House Prices Will Stay Low

An ongoing recession and the
continuing problems in the Eurozone are set to see prices of property in Italy
fall again in 2012.  That’s the
conclusion of a recent report from the research institute Nomisma which also
believes that new Government plans will also keep prices low in the near
future.

Keep reading to learn more about
why prices of property in Italy are set to remain competitive to new buyers.

Number of house sales in Italy set to fall to 12 year low

Italian research institute
Nomisma’s new report found that the number of house sales in Italy in 2012 is
likely to be at the lowest level since 2000.

Transactions may fall by as much
as 12 per cent this year to 529,306, the lowest in at least 12 years.  This prediction comes after the number
of house sales fell by a fifth in the first quarter of 2012.  The Bologna-based institute also
reported that prices of new homes fell by 1.8 per cent in the first half of
this year.  Prices are now 11 per
cent lower than the 2008 peak, according to the study based on a survey of the
13 biggest cities in Italy.

“The deteriorating economic
context, coupled with more selective borrowing conditions and the widespread
expectations of a wider depreciation than already recorded are the main reasons
for the new halt to the real estate market,” Nomisma said.

Bloomberg reports that Italy’s
economy may contract by as much as 2.4 per cent this year.  The news service reports that ‘amid
rising unemployment and Prime Minister Mario Monti’s austerity measures
weighing on consumer demand’, home sales are set to fall further.

A Finance Ministry agency
reported in June that Italian home sales posted the biggest drop since data
collection began in 2004 in the first quarter of 2012.  A new property levy, marking the return
of taxation on primary residences after four years, ‘won’t be an incentive for
the market’ in coming months, the Agenzia del Territorio said in that report.